Highlights for the First Quarter Ended
March 31, 2018
Maiden Holdings, Ltd. (NASDAQ:MHLD) (“Maiden” or “the Company”)
today reported first quarter 2018 net income attributable to Maiden
common shareholders of $13.7 million or $0.16 per diluted common
share compared to net income attributable to Maiden common
shareholders of $20.5 million or $0.23 per diluted common share in
the first quarter of 2017. Non-GAAP operating earnings(11)
were $16.8 million, or $0.20 per diluted common share compared with
a non-GAAP operating earnings of $22.6 million, or $0.26 per
diluted common share in the first quarter of 2017.
Commenting on the Company’s results, President
and Chief Executive Officer, Art Raschbaum said, “We are pleased to
start the year with a profitable first quarter. Underwriting
results primarily reflect the impact of higher initial current year
loss ratios, a modest level of adverse development and higher
G&A expenses. Revenue in the quarter was influenced by a
continued moderation of premium from our largest client, AmTrust,
and in the Diversified segment from several accounts terminated
over the last 12 months. Business development in the quarter
was strong across the Diversified segment which should favorably
impact future quarters. We remain committed to maintaining
disciplined underwriting and enhancing profitability. As previously
announced, our Board of Directors has retained BoA Merrill Lynch to
assist the Company in evaluating strategic alternatives to enhance
value and the Company continues to be actively engaged in this
process but has no further update at this time.”
Consolidated Results for the First
Quarter Ended March 31, 2018
In the first quarter of 2018, gross premiums
written decreased to $852.6 million from $923.4 million primarily
due to non-renewals and re-underwriting of certain Diversified
contracts conducted in both 2017 and in early 2018. Net premiums
written totaled $849.3 million in the first quarter of 2018, a
decrease of 5.7% compared to $900.5 million in the first quarter of
2017. Net premiums earned were $685.4 million in the first
quarter of 2018 compared to $709.5 million in the first quarter of
2017, representing a decrease of 3.4%.
Net loss and loss adjustment expenses of $473.3
million compared to $480.6 million in the first quarter of
2017. The loss ratio(6) in the first quarter of 2018 was
68.6% compared to 67.4% reported in the first quarter of 2017.
Commission and other acquisition expenses
decreased 6.0% to $208.6 million in the first quarter of 2018,
compared to $222.0 million in the first quarter of 2017 reducing
the commission and other acquisition expense ratio to 30.3% from
31.1%, respectively. General and administrative expenses for
the first quarter of 2018 totaled $20.0 million compared with $17.4
million in the first quarter of 2017 primarily due to higher audit,
legal and other professional fees and technology-related expenses.
The general and administrative expense ratio(8) in the first
quarter of 2018 increased to 2.9% compared to 2.4% in the first
quarter of 2017, while the expense ratio(9) was 33.2% in the first
quarter of 2018 compared with 33.5% in the same quarter last
year.
The combined ratio(10) for the first quarter of
2018 totaled 101.8% compared with 100.9% in the first quarter of
2017.
Net investment income was $42.9 million in the
first quarter of 2018 compared to $42.2 million in the first
quarter of 2017. As of March 31, 2018, the average yield on
the fixed income portfolio was 3.18% while the average duration of
investable assets was 4.7 years.
Diversified Reinsurance
Segment
|
|
For the Three Months Ended March
31, |
|
|
($ in thousands) |
|
2018 |
|
2017 |
|
Change in (%) |
Gross
premiums written |
|
$ |
278,712 |
|
|
$ |
332,045 |
|
|
(16.1 |
)% |
Net
premiums written |
|
$ |
274,953 |
|
|
$ |
327,496 |
|
|
(16.0 |
)% |
Net
premiums earned |
|
$ |
194,134 |
|
|
$ |
201,842 |
|
|
(3.8 |
)% |
|
|
|
|
|
|
|
Underwriting Ratios |
|
|
|
|
|
% Point Change |
Net
loss and LAE ratio(6) |
|
68.6 |
% |
|
67.5 |
% |
|
1.1 |
|
Commission and other acquisition expense ratio(7) |
|
25.9 |
% |
|
28.2 |
% |
|
(2.3 |
) |
General and administrative expense ratio(8) |
|
5.1 |
% |
|
4.2 |
% |
|
0.9 |
|
Expense ratio(9) |
|
31.0 |
% |
|
32.4 |
% |
|
(1.4 |
) |
Combined ratio(10) |
|
99.6 |
% |
|
99.9 |
% |
|
(0.3 |
) |
Gross premiums written and net premiums written
decreased by 16.1% and 16.0%, respectively, in the first quarter of
2018 primarily as a result of non-renewals and re-underwriting of
certain contracts in 2017 and during the first quarter of 2018,
with one large terminated account having returned premium of $17.5
million. Net premiums earned decreased by 3.8% in the first quarter
of 2018 due to non-renewals and other underwriting actions taken as
mentioned above. The segment’s combined ratio was 99.6% in
the first quarter of 2018 compared to 99.9% in the same period last
year due to lower adverse prior year loss development. The combined
ratio also reflects higher initial current year loss ratios for
premiums earned during the period.
AmTrust Reinsurance Segment
|
|
For the Three Months Ended March
31, |
|
|
($ in thousands) |
|
2018 |
|
2017 |
|
Change in (%) |
Gross
premiums written |
|
$ |
573,928 |
|
|
$ |
591,382 |
|
|
(3.0 |
)% |
Net
premiums written |
|
$ |
574,380 |
|
|
$ |
573,052 |
|
|
0.2 |
% |
Net
premiums earned |
|
$ |
491,298 |
|
|
$ |
507,642 |
|
|
(3.2 |
)% |
|
|
|
|
|
|
|
Underwriting Ratios |
|
|
|
|
|
% Point Change |
Net
loss and LAE ratio(6) |
|
68.7 |
% |
|
67.3 |
% |
|
1.4 |
|
Commission and other acquisition expense ratio(7) |
|
32.0 |
% |
|
32.3 |
% |
|
(0.3 |
) |
General and administrative expense ratio(8) |
|
0.2 |
% |
|
0.2 |
% |
|
— |
|
Expense ratio(9) |
|
32.2 |
% |
|
32.5 |
% |
|
(0.3 |
) |
Combined ratio(10) |
|
100.9 |
% |
|
99.8 |
% |
|
1.1 |
|
Gross premiums written decreased 3.0% during the
first quarter of 2018 and reflects reductions in the Small
Commercial and Program businesses. Net premiums written increased
by 0.2% in the first quarter of 2018 largely due to a reduction in
the utilization of retrocessional capacity in 2018 compared to
2017. Net premiums earned in the segment decreased by 3.2% compared
to the same period in 2017 mainly due to the decline in net
premiums written in the AmTrust quota share. The segment
experienced adverse prior year development of $8.5 million for the
first quarter of 2018 largely from General Liability, with a
smaller contribution from Commercial Auto Liability, primarily
driven by accident years 2015 and 2016. The segment combined
ratio was 100.9% in the first quarter of 2018 compared to 99.8% in
the same period in 2017 primarily due to higher initial current
year loss ratios for premiums earned during the period slightly
offset by a comparatively smaller amount of adverse prior period
loss development.
Other Financial Matters
- Total assets increased to $6.8 billion at March 31, 2018
compared to $6.6 billion at year-end 2017.
Shareholders' equity was $1.16 billion at March 31, 2018 compared
to $1.23 billion at year end 2017.
- Book value per common share(1) was $8.34 at March 31, 2018
compared to $9.25 at December 31, 2017. In the first quarter of
2018, the Company recognized unrealized losses in its fixed income
investment portfolio of $68.3 million which represents a decrease
of $0.82 in book value per common share.
- During the first quarter of 2018, the Board of Directors
declared dividends of $0.15 per common share, $0.515625 per Series
A preference shares, $0.445313 per Series C preference shares and
$0.418750 per Series D preference shares.
(1)(11) Please see the Non-GAAP Financial
Measures table for additional information on these non-GAAP
financial measures and reconciliation of these measures to GAAP
measures.
(6)(7)(8)(9)(10) Loss ratio, commission and
other acquisition expense ratio, general and administrative expense
ratio, expense ratio and combined ratio are non-GAAP operating
metrics. Please see the additional information on these measures
under Non-GAAP Financial Measures tables.
Conference CallMaiden’s President and Chief
Executive Officer, Art Raschbaum and Chief Financial Officer, Karen
Schmitt will review these results on Thursday, May 10, 2018
via teleconference and live audio webcast beginning at 8:30 a.m.
ET.
To participate in the conference call, please
access one of the following at least five minutes prior to the
start time: U.S. Callers: 1.877.734.5373, Outside U.S. Callers:
1.973.200.3059, Conference ID: 9075799, Webcast:
http://www.maiden.bm/news_events
A replay of the conference call will be
available beginning at 11:30 a.m. ET on May 10, 2018 through
11:30 a.m. ET on May 18, 2018. To listen to the replay, please dial
toll free: 1.855.859.2056 (U.S. Callers) or toll: 1.404.537.3406
(callers outside the U.S.) and enter the Conference ID: 9075799; or
access http://www.maiden.bm/news_events
About Maiden Holdings, Ltd.
Maiden Holdings, Ltd. is a Bermuda-based holding
company formed in 2007. Through its subsidiaries, which are
each rated A- (excellent) by A.M. Best, the Company is
focused on providing non-catastrophic, customized reinsurance
products and services to small and mid-size insurance companies in
the United States and Europe. As of March 31, 2018,
Maiden had $6.8 billion in assets and shareholders' equity of $1.2
billion.
Forward Looking Statements
This release contains "forward-looking
statements" which are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. The
forward-looking statements are based on the Company's current
expectations and beliefs concerning future developments and their
potential effects on the Company. There can be no assurance that
actual developments will be those anticipated by the Company.
Actual results may differ materially from those projected as a
result of significant risks and uncertainties, including
non-receipt of the expected payments, changes in interest rates,
effect of the performance of financial markets on investment income
and fair values of investments, developments of claims and the
effect on loss reserves, accuracy in projecting loss reserves, the
impact of competition and pricing environments, changes in the
demand for the Company's products, the effect of general economic
conditions and unusual frequency of storm activity, adverse state
and federal legislation, regulations and regulatory investigations
into industry practices, developments relating to existing
agreements, heightened competition, changes in pricing
environments, and changes in asset valuations. Additional
information about these risks and uncertainties, as well as others
that may cause actual results to differ materially from those
projected is contained in Item 1A. Risk Factors in the Company's
Annual Report on Form 10-K for the year ended December 31,
2017 as updated in periodic filings with the SEC. However these
factors should not be construed as exhaustive. Forward-looking
statements speak only as of the date they are made and the Company
undertakes no obligation to update or revise any forward-looking
statement that may be made from time to time, whether as a result
of new information, future developments or otherwise, except as
required by law.
CONTACT:
Bill Horning, Senior Vice President, Investor RelationsMaiden
Holdings, Ltd.Phone: 856.359.2532E-mail: bhorning@maiden.bm
Maiden Holdings, Ltd. |
Consolidated Balance
Sheets |
(in thousands (000's), except per share
data) |
|
|
|
|
March 31, 2018 |
|
|
December 31, 2017 |
|
|
|
(Unaudited) |
|
|
(Audited) |
|
Assets |
|
|
|
|
|
|
Fixed
maturities, available-for-sale, at fair value (Amortized cost 2018:
$4,034,021 ; 2017: $4,027,993) |
$ |
3,984,733 |
|
|
$ |
4,044,370 |
|
|
Fixed
maturities, held-to-maturity, at amortized cost (Fair value 2018:
$1,069,980; 2017: $1,125,626) |
|
1,071,361 |
|
|
|
1,097,801 |
|
|
Other
investments |
|
6,426 |
|
|
|
6,600 |
|
|
Total
investments |
|
5,062,520 |
|
|
|
5,148,771 |
|
|
Cash and cash
equivalents |
|
73,276 |
|
|
|
67,919 |
|
|
Restricted cash and
cash equivalents |
|
87,761 |
|
|
|
123,584 |
|
|
Accrued investment
income |
|
36,010 |
|
|
|
34,993 |
|
|
Reinsurance balances
receivable, net |
|
548,218 |
|
|
|
345,043 |
|
|
Reinsurance recoverable
on unpaid losses |
|
114,499 |
|
|
|
117,611 |
|
|
Loan to related
party |
|
167,975 |
|
|
|
167,975 |
|
|
Deferred commission and
other acquisition expenses, net |
|
475,496 |
|
|
|
439,597 |
|
|
Goodwill and intangible
assets, net |
|
75,121 |
|
|
|
75,583 |
|
|
Other assets |
|
116,433 |
|
|
|
123,113 |
|
|
Total Assets |
$ |
6,757,309 |
|
|
$ |
6,644,189 |
|
|
Liabilities
and Equity |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Reserve for loss and
loss adjustment expenses |
$ |
3,616,610 |
|
|
$ |
3,547,248 |
|
|
Unearned premiums |
|
1,629,870 |
|
|
|
1,477,038 |
|
|
Accrued expenses and
other liabilities |
|
97,851 |
|
|
|
132,795 |
|
|
Senior notes -
principal amount |
|
262,500 |
|
|
|
262,500 |
|
|
Less:
unamortized debt issuance costs |
|
7,966 |
|
|
|
8,018 |
|
|
Senior notes, net |
|
254,534 |
|
|
|
254,482 |
|
|
Total Liabilities |
|
5,598,865 |
|
|
|
5,411,563 |
|
|
Commitments and Contingencies |
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Preference Shares |
|
465,000 |
|
|
|
465,000 |
|
|
Common shares |
|
879 |
|
|
|
877 |
|
|
Additional paid-in
capital |
|
749,054 |
|
|
|
748,113 |
|
|
Accumulated other
comprehensive (loss) income |
|
(62,915 |
) |
|
|
13,354 |
|
|
Retained earnings |
|
36,727 |
|
|
|
35,472 |
|
|
Treasury shares, at
cost |
|
(30,835 |
) |
|
|
(30,642 |
) |
|
Total Maiden
Shareholders’ Equity |
|
1,157,910 |
|
|
|
1,232,174 |
|
|
Noncontrolling
interest in subsidiaries |
|
534 |
|
|
|
452 |
|
|
Total Equity |
|
1,158,444 |
|
|
|
1,232,626 |
|
|
Total Liabilities and Equity |
$ |
6,757,309 |
|
|
$ |
6,644,189 |
|
|
|
|
|
|
|
|
|
Book value per
common share(1) |
$ |
8.34 |
|
|
$ |
9.25 |
|
|
|
|
|
|
|
|
|
Common shares
outstanding |
|
83,118,237 |
|
|
|
82,974,895 |
|
Maiden Holdings, Ltd. |
Consolidated Statements of Income |
(in thousands (000's), except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
For the Three Months Ended March
31, |
|
2018 |
|
2017 |
Revenues: |
|
|
|
|
|
Gross premiums
written |
$ |
852,640 |
|
|
$ |
923,427 |
|
Net premiums
written |
$ |
849,333 |
|
|
$ |
900,548 |
|
Change in unearned
premiums |
|
(163,901 |
) |
|
|
(191,064 |
) |
Net premiums earned |
|
685,432 |
|
|
|
709,484 |
|
Other insurance
revenue |
|
3,726 |
|
|
|
3,781 |
|
Net investment
income |
|
42,870 |
|
|
|
42,157 |
|
Net realized gains on
investment |
|
357 |
|
|
|
885 |
|
Total revenues |
|
732,385 |
|
|
|
756,307 |
|
Expenses: |
|
|
|
|
|
Net loss and loss
adjustment expenses |
|
473,324 |
|
|
|
480,569 |
|
Commission and other
acquisition expenses |
|
208,614 |
|
|
|
222,029 |
|
General and
administrative expenses |
|
19,950 |
|
|
|
17,414 |
|
Total expenses |
|
701,888 |
|
|
|
720,012 |
|
|
|
|
|
|
|
Non-GAAP income
from operations(2) |
|
30,497 |
|
|
|
36,295 |
|
|
|
|
|
|
|
Other
expenses: |
|
|
|
|
|
Interest and
amortization expenses |
|
(4,829 |
) |
|
|
(6,856 |
) |
Amortization of
intangible assets |
|
(462 |
) |
|
|
(533 |
) |
Foreign exchange
losses |
|
(2,407 |
) |
|
|
(1,921 |
) |
Total other expenses |
|
(7,698 |
) |
|
|
(9,310 |
) |
|
|
|
|
|
|
Income before
income taxes |
|
22,799 |
|
|
|
26,985 |
|
Less: income tax
expense |
|
456 |
|
|
|
484 |
|
|
|
|
|
|
|
Net
income |
|
22,343 |
|
|
|
26,501 |
|
Add: net (income) loss
attributable to noncontrolling interest |
|
(71 |
) |
|
|
22 |
|
Net income
attributable to Maiden |
|
22,272 |
|
|
|
26,523 |
|
Dividends on preference
shares(3) |
|
(8,545 |
) |
|
|
(6,033 |
) |
Net income
attributable to Maiden common shareholders |
$ |
13,727 |
|
|
$ |
20,490 |
|
|
|
|
|
|
|
Basic earnings
per common share attributable to Maiden shareholders |
$ |
0.17 |
|
|
$ |
0.24 |
|
Diluted
earnings per common share
attributable to Maiden shareholders |
$ |
0.16 |
|
|
$ |
0.23 |
|
Dividends
declared per common share |
$ |
0.15 |
|
|
$ |
0.15 |
|
Annualized
return on average common equity |
|
7.6 |
% |
|
|
7.9 |
% |
|
|
|
|
|
|
Weighted
average number of common shares - basic |
|
83,040,413 |
|
|
|
86,350,850 |
|
Adjusted
weighted average number of common shares and assumed conversions -
diluted |
|
83,318,542 |
|
|
|
87,436,604 |
|
|
|
|
|
|
|
Maiden Holdings, Ltd. |
Supplemental Financial Data - Segment
Information |
(in thousands (000's)) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2018 |
|
Diversified Reinsurance |
|
|
AmTrust Reinsurance |
|
|
Other |
|
|
Total |
|
Gross
premiums written |
|
$ |
278,712 |
|
|
|
$ |
573,928 |
|
|
|
$ |
- |
|
|
|
$ |
852,640 |
|
|
Net premiums
written |
|
$ |
274,953 |
|
|
|
$ |
574,380 |
|
|
|
$ |
- |
|
|
|
$ |
849,333 |
|
|
Net premiums
earned |
|
$ |
194,134 |
|
|
|
$ |
491,298 |
|
|
|
$ |
- |
|
|
|
$ |
685,432 |
|
|
Other insurance
revenue |
|
|
3,726 |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
3,726 |
|
|
Net loss and loss
adjustment expenses ("loss and LAE") |
|
|
(135,612 |
) |
|
|
|
(337,307 |
) |
|
|
|
(405 |
) |
|
|
|
(473,324 |
) |
|
Commissions and other
acquisition expenses |
|
|
(51,298 |
) |
|
|
|
(157,316 |
) |
|
|
|
- |
|
|
|
|
(208,614 |
) |
|
General and
administrative expenses(4) |
|
|
(10,119 |
) |
|
|
|
(920 |
) |
|
|
|
- |
|
|
|
|
(11,039 |
) |
|
Underwriting
income
(loss)(5) |
|
$ |
831 |
|
|
|
$ |
(4,245 |
) |
|
|
$ |
(405 |
) |
|
|
$ |
(3,819 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
and realized gains on investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,227 |
|
|
Interest and
amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,829 |
) |
|
Amortization of
intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(462 |
) |
|
Foreign exchange
losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,407 |
) |
|
Other general and
administrative expenses(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,911 |
) |
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(456 |
) |
|
Net
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
22,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and LAE
ratio(6) |
|
|
68.6 |
% |
|
|
|
68.7 |
% |
|
|
|
|
|
|
|
68.6 |
% |
|
Commission and other
acquisition expense ratio(7) |
|
|
25.9 |
% |
|
|
|
32.0 |
% |
|
|
|
|
|
|
|
30.3 |
% |
|
General and
administrative expense ratio(8) |
|
|
5.1 |
% |
|
|
|
0.2 |
% |
|
|
|
|
|
|
|
2.9 |
% |
|
Expense ratio(9) |
|
|
31.0 |
% |
|
|
|
32.2 |
% |
|
|
|
|
|
|
|
33.2 |
% |
|
Combined
ratio(10) |
|
|
99.6 |
% |
|
|
|
100.9 |
% |
|
|
|
|
|
|
|
101.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2017 |
|
Diversified Reinsurance |
|
|
AmTrust Reinsurance |
|
|
Other |
|
|
Total |
|
Gross
premiums written |
|
$ |
332,045 |
|
|
|
$ |
591,382 |
|
|
|
$ |
- |
|
|
|
$ |
923,427 |
|
|
Net premiums
written |
|
$ |
327,496 |
|
|
|
$ |
573,052 |
|
|
|
$ |
- |
|
|
|
$ |
900,548 |
|
|
Net premiums
earned |
|
$ |
201,842 |
|
|
|
$ |
507,642 |
|
|
|
$ |
- |
|
|
|
$ |
709,484 |
|
|
Other insurance
revenue |
|
|
3,781 |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
3,781 |
|
|
Net loss and LAE |
|
|
(138,649 |
) |
|
|
|
(341,631 |
) |
|
|
|
(289 |
) |
|
|
|
(480,569 |
) |
|
Commissions and other
acquisition expenses |
|
|
(57,945 |
) |
|
|
|
(164,084 |
) |
|
|
|
- |
|
|
|
|
(222,029 |
) |
|
General and
administrative expenses(4) |
|
|
(8,730 |
) |
|
|
|
(805 |
) |
|
|
|
- |
|
|
|
|
(9,535 |
) |
|
Underwriting
income
(loss)(5) |
|
$ |
299 |
|
|
|
$ |
1,122 |
|
|
|
$ |
(289 |
) |
|
|
$ |
1,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
and realized gains on investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,042 |
|
|
Interest and
amortization expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,856 |
) |
|
Amortization of
intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(533 |
) |
|
Foreign exchange
losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,921 |
) |
|
Other general and
administrative expenses(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,879 |
) |
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(484 |
) |
|
Net
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
26,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and LAE
ratio(6) |
|
|
67.5 |
% |
|
|
|
67.3 |
% |
|
|
|
|
|
|
|
67.4 |
% |
|
Commission and other
acquisition expense ratio(7) |
|
|
28.2 |
% |
|
|
|
32.3 |
% |
|
|
|
|
|
|
|
31.1 |
% |
|
General and
administrative expense ratio(8) |
|
|
4.2 |
% |
|
|
|
0.2 |
% |
|
|
|
|
|
|
|
2.4 |
% |
|
Expense ratio(9) |
|
|
32.4 |
% |
|
|
|
32.5 |
% |
|
|
|
|
|
|
|
33.5 |
% |
|
Combined
ratio(10) |
|
|
99.9 |
% |
|
|
|
99.8 |
% |
|
|
|
|
|
|
|
100.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maiden Holdings, Ltd. |
|
Non - GAAP Financial Measures |
|
(in thousands (000's), except per share
data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March
31, |
|
|
|
2018 |
|
2017 |
|
Non-GAAP operating earnings attributable to Maiden common
shareholders(11) |
|
$ |
16,818 |
|
|
$ |
22,638 |
|
|
Non-GAAP basic operating earnings per common share
attributable to Maiden shareholders |
|
$ |
0.20 |
|
|
$ |
0.26 |
|
|
Non-GAAP diluted operating earnings per common share
attributable to Maiden shareholders |
|
$ |
0.20 |
|
|
$ |
0.26 |
|
|
Annualized non-GAAP operating return on average common
equity(12) |
|
|
9.3 |
% |
|
|
8.7 |
% |
|
|
|
|
|
|
|
|
|
Reconciliation of net income attributable to Maiden common
shareholders to non-GAAP operating earnings attributable to Maiden
common shareholders: |
|
|
|
|
|
|
|
Net income attributable to Maiden common shareholders |
$ |
13,727 |
|
|
$ |
20,490 |
|
|
Add (subtract) |
|
|
|
|
|
|
Net realized gains on investment |
|
(357 |
) |
|
|
(885 |
) |
|
Foreign exchange losses |
|
2,407 |
|
|
|
1,921 |
|
|
Amortization of intangible assets |
|
462 |
|
|
|
533 |
|
|
Divested excess and surplus ("E&S") business and NGHC
run-off |
|
405 |
|
|
|
289 |
|
|
Non-cash deferred tax expense |
|
174 |
|
|
|
290 |
|
|
Non-GAAP operating earnings attributable to Maiden common
shareholders(11) |
$ |
16,818 |
|
|
$ |
22,638 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares -
basic |
|
83,040,413 |
|
|
|
86,350,850 |
|
|
Adjusted weighted average number of common shares and
assumed conversions - diluted |
|
83,318,542 |
|
|
|
87,436,604 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of diluted earnings per common share
attributable to Maiden shareholders to non-GAAP diluted operating
earnings per common share attributable to Maiden
shareholders: |
|
|
|
|
|
|
|
Diluted
earnings per common share attributable to Maiden shareholders |
$ |
0.16 |
|
|
$ |
0.23 |
|
|
Add
(subtract) |
|
|
|
|
|
|
Net realized gains on investment |
|
- |
|
|
|
(0.01 |
) |
|
Foreign exchange losses |
|
0.03 |
|
|
|
0.02 |
|
|
Amortization of intangible assets |
|
0.01 |
|
|
|
0.01 |
|
|
Non-cash deferred tax expense |
|
- |
|
|
|
0.01 |
|
|
Non-GAAP diluted operating earnings per common share
attributable to Maiden shareholders |
|
$ |
0.20 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income attributable to Maiden to
non-GAAP income from operations: |
|
|
|
|
|
|
|
Net income
attributable to Maiden |
$ |
22,272 |
|
|
$ |
26,523 |
|
|
Add
(subtract) |
|
|
|
|
|
|
Foreign exchange losses |
|
2,407 |
|
|
|
1,921 |
|
|
Amortization of intangible assets |
|
462 |
|
|
|
533 |
|
|
Interest and amortization expenses |
|
4,829 |
|
|
|
6,856 |
|
|
Income tax expense |
|
456 |
|
|
|
484 |
|
|
Net income (loss) attributable to noncontrolling interest |
|
71 |
|
|
|
(22 |
) |
|
Non-GAAP income from
operations(2) |
$ |
30,497 |
|
|
$ |
36,295 |
|
|
|
|
|
|
|
|
|
|
Maiden Holdings, Ltd. |
|
Non - GAAP Financial Measures |
|
(in thousands (000's), except per share
data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2018 |
|
December 31, 2017 |
|
Investable assets: |
|
|
|
|
|
|
Total
investments |
$ |
5,062,520 |
|
$ |
5,148,771 |
|
Cash and
cash equivalents |
|
73,276 |
|
|
67,919 |
|
Restricted
cash and cash equivalents |
|
87,761 |
|
|
123,584 |
|
Loan to
related party |
|
167,975 |
|
|
167,975 |
|
Total
investable assets(13) |
$ |
5,391,532 |
|
$ |
5,508,249 |
|
|
|
|
|
|
|
|
|
|
|
March 31, 2018 |
|
December 31, 2017 |
|
Capital: |
|
|
|
|
|
|
Preference
shares |
$ |
465,000 |
|
$ |
465,000 |
|
Common
shareholders' equity |
|
692,910 |
|
|
767,174 |
|
Total Maiden shareholders' equity |
|
1,157,910 |
|
|
1,232,174 |
|
2016 Senior
Notes |
|
110,000 |
|
|
110,000 |
|
2013 Senior
Notes |
|
152,500 |
|
|
152,500 |
|
Total capital resources(14) |
$ |
1,420,410 |
|
$ |
1,494,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Book value per common share is calculated using
Maiden common shareholders’ equity (shareholders' equity excluding
the aggregate liquidation value of our preference shares) divided
by the number of common shares outstanding. |
|
|
|
|
|
|
|
|
|
(2) Non-GAAP income from operations is a non-GAAP
financial measure defined by the Company as net income attributable
to Maiden excluding foreign exchange and other gains and losses,
amortization of intangible assets, interest and amortization
expenses, income tax expense and net income or loss attributable to
noncontrolling interest and should not be considered as an
alternative to net income. The Company’s management believes
that non-GAAP income from operations is a useful measure of the
Company’s underlying earnings fundamentals based on its
underwriting and investment income before financing costs. This
income from operations enables readers of this information to more
clearly understand the essential operating results of the Company.
The Company’s measure of non-GAAP income from operations may not be
comparable to similarly titled measures used by other
companies. |
|
|
|
|
|
|
|
|
|
(3) Dividends on preference shares consist of $3,094
paid to Preference shares - Series A for the three months ended
March 31, 2018 and 2017, $2,939 paid to Preference shares - Series
C for the three months ended March 31, 2018 and 2017, and $2,512
and $0 paid to Preference shares - Series D for the three months
ended March 31, 2018 and 2017, respectively. |
|
|
|
|
|
|
|
|
|
(4) Underwriting related general and administrative
expenses is a non-GAAP measure and includes expenses which are
segregated for analytical purposes as a component of underwriting
income. |
|
|
|
|
|
|
|
|
|
(5) Underwriting (loss) income is a non-GAAP measure
and is calculated as net premiums earned plus other insurance
revenue less net loss and LAE, commission and other acquisition
expenses and general and administrative expenses directly related
to underwriting activities. Management believes that this measure
is important in evaluating the underwriting performance of the
Company and its segments. This measure is also a useful tool to
measure the profitability of the Company separately from the
investment results and is also a widely used performance indicator
in the insurance industry. |
|
|
|
|
|
|
|
|
|
(6) Calculated by dividing net loss and LAE by the sum
of net premiums earned and other insurance revenue. |
|
|
|
|
|
|
|
|
|
(7) Calculated by dividing commission and other
acquisition expenses by the sum of net premiums earned and other
insurance revenue. |
|
|
|
|
|
|
|
|
|
(8) Calculated by dividing general and administrative
expenses by the sum of net premiums earned and other insurance
revenue. |
|
|
|
|
|
|
|
|
|
(9) Calculated by adding together the commission and
other acquisition expense ratio and general and administrative
expense ratio. |
|
|
|
|
|
|
|
|
|
(10) Calculated by adding together the net loss and LAE
ratio and the expense ratio. |
|
|
|
|
|
|
|
|
|
(11) Non-GAAP operating earnings is a non-GAAP
financial measure defined by the Company as net income attributable
to Maiden common shareholders excluding realized and unrealized
investment gains and losses, foreign exchange and other gains and
losses, amortization of intangible assets, divested E&S
business and NGHC run-off and non-cash deferred tax expense and
should not be considered as an alternative to net income. The
Company's management believes that non-GAAP operating earnings is a
useful indicator of trends in the Company's underlying operations.
The Company's measure of non-GAAP operating earnings may not be
comparable to similarly titled measures used by other
companies. |
|
|
|
|
|
|
|
|
|
(12) Non-GAAP operating return on average common equity
is a non-GAAP financial measure. Management uses non-GAAP operating
return on average common shareholders' equity as a measure of
profitability that focuses on the return to Maiden common
shareholders. It is calculated using non-GAAP operating earnings
attributable to Maiden common shareholders divided by average
Maiden common shareholders' equity. |
|
|
|
|
|
|
|
|
|
(13) Investable assets is the total of the Company's
investments, cash and cash equivalents and loan to a related
party. |
|
|
|
|
|
|
|
|
|
(14) Total capital resources is the sum of the
Company's principal amount of debt and Maiden shareholders'
equity. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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